September 17, 2023
Economy Pakistan

Pakistan’s Ministry of Energy Approves Revised Circular Debt Management Plan for FY2023

The Pakistani government has approved a revised plan to manage circular debt, aimed at collecting electricity bills deferred due to floods in the previous year.

The Ministry of Energy has estimated that it will collect approximately Rs. 55 billion in electricity bills from consumers, along with an additional Rs. 73 billion through increased tariffs from February to November 2023.

The government has implemented a Quarterly Tariff Adjustment (QTA) and is forecasting a new iteration for forecasting power purchases price.The revised plan also includes the discontinuation of Kissan and Zero Rated Industrial packages, saving the government Rs. 65 billion, and minimizing the losses of DISCOs to 16.27% by the end of FY23.

The Ministry of Energy aims to maintain a recovery ratio of 90% and will renegotiate power purchase agreements with six wind power plants and Uch Power Limited.The projected circular debt flow for the year is Rs. 336 billion, with a revised circular debt projection of Rs. 122 billion after stock payments. The circular debt stock for FY23 is estimated to be Rs. 2,374 billion.

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